Sulliden vs Geologix: GIX 4,300% from a fair valution?
Sulliden Gold Corporation is in the process of merging with Rio Alto and today their market cap is at $370 m fully diluted. They are still not through the permitting process and they have not secured financing for construction. At the same time Geologix market cap is only $8,5 m despite having higher NPV than Sulliden. I find this extreme difference in valution of comparable companies quite extraordinarily, here are the numbers:
Sulliden Gold Corporation
Location: Peru
Resources: 4 moz gold, 80 moz silver
Production profile: 90,000 oz/year
All-in cash cost: $826/oz
IRR after tax: 41,3% (at $1500/oz au)
NPV afeter tax: $248 m (at $1415/oz au)
Capex: $131,8 m
LOM: 10 years
Payback after tax: 2.2 years
Cash: $49 m
Market cap: 370 m
Market cap per oz: $74
Geologix Explorations
Location: Mexico
Resources: 4,5 moz au eq (1,8 moz gold, 809 Mlbs koppar)
Capex: $354 m
Production capacity: 116,000 oz au (243,000 with copper & silver)
Start of production: 2017
LOM: 11,5 år
IRR: 34% after tax at $1518/oz gold & $3,71/lb copper
NPV: $568 m after tax at $1518/oz 5% discount rate
Payback: 2,9 years
Cash cost: $191 net of copper after tax all-in sustaining
Market cap: $8,5 m
Market cap per eq oz: $2
To reach Sullidens market cap Geologix has to rise 4,300% from here, absolutely amazing.
